Download internal and external business environment

Survey
yes no Was this document useful for you?
   Thank you for your participation!

* Your assessment is very important for improving the work of artificial intelligence, which forms the content of this project

Document related concepts
no text concepts found
Transcript
INTERNAL AND EXTERNAL
BUSINESS ENVIRONMENT
INTERNAL ENVIRONMENT
•
These are factors from inside the firm that could
affect performance.
1. Finance Available – without money the firm may
not be able to do what they wish.
2. Ability of Staff – the more capable staff are the
more productive they will be.
3. Information Available – the better the
information the better the decisions made.
4. ICT Availability – this can influence the
quality and quantity of what is produced
5. Ability of Management – good managers
will make good decisions
6. Changes in Costs – increases in wages or
raw materials can affect the profitability of
the firm
EXTERNAL ENVIRONMENT
• This is summarised as:
•
•
•
•
•
•
Political
Economic
Social
Technological
Environmental
Competitive
POLITICAL
• Laws passed in the UK and the EU can affect the
what a business does.
• E.g. shops are not allowed to sell alcohol on
Sunday mornings or the smoking ban in public
places.
• Failure to follow laws will result in fines.
• Other ways the government can influence is
through setting taxation rates and investment in
infrastructure.
ECONOMIC
• This includes changes in interest rates,
exchange rates, inflation and the economic
cycle.
• If interest rates are high this could stop
firms from borrowing money also
customers are less likely to borrow or use
credit cards to make purchases.
• If the pound is high against other currencies
this makes it hard to export goods abroad,
reducing the number of sales.
• If inflation is high, the prices of raw
materials can be expensive which can
reduce profits.
• If the economy is in recession, people tend
to be unemployed or worried about losing
their job, therefore not spending money on
luxury goods.
SOCIAL
• DEMOGRAPHIC CHANGES
• This is to do with the size and distribution of the
population of a country.
• E.g. The UK has an ageing population, this has led
to a rise in products aimed at older people
(SAGA) and firms recruiting older workers
(B&Q)
• SOCIO-CULTURAL CHANGES
• This is about changes in lifestyle and attitude.
• E.g. More women working has seen a rise in ready
meal and later opening hours
• More concern about the environment, forcing
firms to maybe use recycled products.
• People have more leisure time, changes in attitude
to single mothers have also affected the types of
products offered.
TECHNOLOGICAL
• Firms need to keep up-to-date with the latest
technology in order to remain competitive.
• Have seen a huge growth in e-commerce (buying
and selling online)
• Use of machinery in the production process –
more efficient and cheaper.
ENVIRONMENTAL
• Firms are aware that they have to be more
environmentally friendly, not only because
that is what customers want, but can be
forced by the government to do so.
• It can also include storms, floods, noise. All
these can affect how a business operates.
COMPETITIVE
• What the competition is doing can affect
how a business operates.
• Firms now not only face domestic
competition but also foreign.
• Have to keep up or be better than your
competition to keep your customers.